Board cautions that enrollees keeping money in the G Fund are losing out on potential gains.

Federal employees and retirees moved their retirement savings out of equity funds and into government securities in June in large numbers during a down month sparked by Brexit’s fallout.

Thrift Savings Plan enrollees moved $1.8 billion into the G Fund in June, transferring money out of equity funds -- most significantly the S Fund, invested in small and mid-size companies, and International (I) Fund. The I Fund dropped precipitously in June as the TSP struggled overall in the month. A vote in June by the United Kingdom to leave the European Union sent markets into free fall, though they have mostly recovered.

Kim Weaver, a spokeswoman for the Federal Retirement Thrift Investment Board, which manages the TSP, said the agency cannot be “absolutely positive,” but it is “likely” that the steep market crash resulting after Brexit caused enrollees to panic and move their funds into the more stable G Fund. She noted, however, such a move may have been short sighted.

“If someone did that and stayed in the G Fund, they would have missed the market growth that we experienced in July,” Weaver said.

President Obama signed a law in 2014 to automatically enroll new federal employees into the age-appropriate lifecycle (L) fund, choosing to default participants into the higher-yielding L Fund rather than the safer G Fund.

At an FRTIB meeting Monday, board officials said hardship withdrawals have experienced a typical summertime spike. While the withdrawals are up 10 percent in July, the board projected the total volume of removals this year would drop 5 percent compared to 2015.

The board said it is working hard to prepare for the blended retirement system created by the 2016 National Defense Authorization Act. The law required auto-enrollment of new troops into the TSP by 2018, a deadline FRTIB said it is on schedule to meet.

The board is working on “higher-capacity requirements,” an agency official said, doing “considerable work” on both the participant-facing element as well as back-end preparations. FRTIB is already “well down the road” in those efforts, those working on the project said Monday.